Melbourne-Colombo route boosted by expanded partnership between national carriers

SriLankan Airlines’ expansion of its codeshare agreement with Qantas should improve the long-term viability of its new Melbourne-Colombo route.

The two airlines have been codeshare partners since Oct-2014, a few months after SriLankan joined the oneworld alliance. However, until now the partnership has only offered passengers a joint option between Colombo and Australia, with a transfer between the two airlines in Singapore. SriLankan operates three daily flights from Colombo to Singapore, facilitating quick connections to Qantas flights from Singapore to Brisbane, Melbourne, Perth and Sydney.

On 22-Nov-2017 Qantas and SriLankan announced an extension of their codeshare which will be implemented from 18-Dec-2017. The additional Qantas operated codeshare flights will feed SriLankan’s new Melbourne-Colombo flight by providing connections with Adelaide, Auckland, Brisbane and Sydney.

The two airlines will also begin codesharing on flights via Bangkok and Hong Kong. SriLankan currently operates three daily flights to Bangkok and five weekly flights to Hong Kong. Qantas serves Bangkok from Sydney and Hong Kong from Brisbane, Melbourne and Sydney.

Passengers heading from Brisbane to Colombo will now have the option of going via Hong Kong, Melbourne or Singapore compared to just Singapore currently. Passengers heading from Sydney to Colombo will have the option of going via Bangkok, Hong Kong, Melbourne or Singapore compared to just Singapore currently.

Melbourne-Colombo passengers will also gain a Hong Kong option although obviously most passengers will opt for the nonstop service available in this market. Adelaide and Auckland become totally new destinations under the Qantas-SriLankan partnership.

The expanded deal is significant for SriLankan as it provides feed for its new Melbourne service. SriLankan’s Melbourne flight lands at 15:25 and departs at 16:55, enabling same day connections to virtually anywhere in Australia and Auckland. Connections to Christchurch and Wellington do not work well but these are small and insignificant market for Sri Lanka traffic.

SriLankan launched daily flights from Melbourne to Colombo on 30-Oct-2017. SriLankan is relying heavily on connections to India to support the new service. As Blue Swan has previously analysed, SriLankan’s decision to add a second daily flight from Colombo to Mumbai, that connects with Melbourne, should improve the viability of the Melbourne-Colombo route.

Offering domestic connections and a connection to Auckland should enable SriLankan to attract even more passengers on the new service. While SriLankan selected Melbourne as it has the largest SriLankan community in Australia, there is traffic from the rest of Australia and New Zealand to Sri Lanka.

Outbound leisure traffic is particularly fragmented while ethnic traffic is more focused on Melbourne. Sri Lanka reported an 8% increase in Australian visitor numbers and a 12% increase in New Zealand visitor numbers for the first 10 months of 2017. Annual visitor numbers from both source markets roughly doubled from 2012 to 2016 but on a very small base.

SriLankan needs to attract virtually all Australia/New Zealand-Sri Lanka traffic as well as significant Melbourne-India traffic in order to make the new Melbourne-Colombo route a success.